Friday, August 01, 2014

Do Unto Others

It is no secret that big business doesn’t like unions.  In fact, they have spent billions of dollars supporting the campaigns of candidates who are anti-union.

But what business doesn’t seem to understand is that if they treated their employees well, if they recognized the importance of a vibrant, viable middle class, then unions wouldn’t be necessary.

Case in point, let’s look at the very real difference between grocery store chain Market Basket and the McDonald's Corporation.  Both are suffering from employee dissatisfaction, both have been the targets of work stoppages but for very different reasons.

McDonald’s workers have been staging strikes to protest wages and the employment practices at the restaurant chain.  In response to these strikes, some of the employees have allegedly been retaliated against by their employer.  Many of those employees have filed complaints and as a result, McD’s finds itself on the wrong end of an important rulingthat could help bolster the case for unionization of its employees. 

In 43 complaints filed with the National Labor Relations Board, the NLRB found that McDonalds, not just its franchise owners, are responsible for how workers are treated.  That means that they are partially liable for any awarded damages in the allegations of wage fraud, retaliatory firings etc.

If McDonald's paid a living wage, if they provided benefits and generally treated their employees better, do you think they would be suffering strikes and labor complaints?  I don’t think so, and to illustrate my point, let’s look at the troubles at Market Basket.

They too are suffering from work stoppages and protests.  Shelves are empty and the company is losing millions of dollars.  Here’s the twist - all this is happening not because they treat their employees poorly, but because they have historically been treated well thanks to the recently ousted CEO Arthur T. Demoulas.  They are protesting because the board of directors of the family owned grocery chain fired Arthur T. for being too good to the employees. 

They are protesting because they want him back. 

Why?  Because starting employees make more than minimum wage, long time managers can make six figure salaries, there were regular bonuses, and the company matched 15 percent of the employee’s salary for their retirement fund.  At Market Basket, an experienced cashier could make as much as 40K a year.

On top of that Arthur T. was visible.  He actually went to the stores, knew the employees (and often their relatives) by name. In other words, he treated the people who had made him and his family members multimillionaires with respect.
What has helped endear Arthur T. to workers proved to be a sticking point for shareholders, as he apparently hasn’t been running the company at the expected level of ruthless corporate efficiency. As the Globe’s Adrian Walker wrote, the generosity of Market Basket’s profit-sharing program particularly irked some board members. In one instance back in 2008, Arthur T. made sure the company made up for a loss of $46 million that the profit-sharing fund suffered during the economic crisis.
It’s no wonder that employees such as Tom Trainor, a district manager of 37 stores who was fired on Sunday, have taken to thinking of Arthur T. as a storybook character. “He’s George Bailey,” Trainor told the Washington Post, invoking the hero of It’s a Wonderful Life. “He cares more about people than he does about money.” []
Let’s be clear, before these protests, the company wasn’t in any trouble, it was doing well.  Everyone was making money.  But the board wants to make more money, and they want to do it by talking the cash out of the pockets of its workers.  And they are, and have been, willing to fight tooth and nail to get as big a slice of the profit pie as possible.
Considering the board’s decision last year, led by Arthur S., (Arthur T.’s cousin, a rival heir to the company who now controls the company’s board) to funnel an extra $250 million of Market Basket takings to its nine family shareholders, it’s easy to see why workers are concerned that they may get short shrift in the shakeup. (The We Are Market Basket website and Facebook page has been compiling a steady list of evidence to that effect.)

This isn’t the first time Arthur S. has tried wresting control of Market Basket from his same-named cousin. An ugly legal battle raged last year in which Arthur S.’s side of the family, who control 50.5 percent of the company, tried to grab some $1.5 billion in payouts on top of the $500 million they’d made in the past decade, according to Globe columnist Adrian Walker. These intra-family fights go back decades. Back in 2000, Massachusetts Lawyers Weekly described the Demoulas vs. Demoulas saga as follows: “One family. Ten years. $800 million. More than a dozen lawyers. One witness on the stand for 17 days. One case that wouldn’t end. … [It] was a monster, a modern-day Hydra: every time one evil head would be severed, two more would sprout in its place.” []
Why do we need unions?  Because greed has become more than commonplace in the boardrooms of corporate America, it has become the prevailing creed under which these companies operate.  Rich isn’t rich enough.  The only good money is more money.  And the workers who make that wealth possible are no more important than the share croppers of old. They are expendable. Their poverty is their problem and the food stamps and welfare they need to survive is paid for by you and me, the taxpayer.

When the tax rates for the very rich were between 70 and 90 percent, it made sense for those people to invest their money in their workers and their companies, but with the loop holes and historically low tax rates they now enjoy it makes it easy to keep that money for themselves.

That is why we need unions, because even the good executives can’t stop the culture of greed that now dominates big business.  And if they can’t survive, if responsible CEO’s like Arthur T. can’t keep their jobs, then who besides a union is left to protect workers and their livelihoods.